Bitch. Moan. Howl.

Why Rich People Can Suck It

Conservative thought tends to value the wealthy in society. I don’t know if this is because they read too much Ayn Rand when they were younger, or if it’s simply a reflection that affluent and upwardly mobile people honestly fear for their own wealth. Anyhow, the general sense from the Fox News type mouthpieces is that the rich are the job creators. They say that taxing the wealthy will result in economic free-fall as government sucks dry the source of economic activity in this country.

That’s bullshit and I’ll tell you why.

The rich aren’t stupid. Well… the rich are at least good with money. Rich people don’t drop cash on things for the hell of it. That means that 90% of the crap made in this country doesn’t go toward the rich. In fact, rich people don’t buy American unless it’s a good bargain– they buy German cars and Swiss watches. Even when they buy stuff in the good old U-S of A, rich people don’t really consume very much and they can afford to buy the best so they aren’t in the same crappy obsolescence cycle the rest of us are stuck in. Finally, there just aren’t very many rich people. The few rich people that we have are WAYYYY loaded while everyone else is scraping by. They don’t have to save up for shit. Giving the wealthy a pass while everyone else is sacrificing for the common good just doesn’t make sense.

Well, maybe the wealthy are job creators. Sure, a rich person could afford to start companies and hire people. They don’t have to and they’re not going to. Like I said, rich people are good with money. By good with money, I mean that they’re good at keeping their money. They can afford to employ people that specialize in investing that roll and making more money. So… what about investors? More investors investing money in companies equals more jobs, eh? Nope.

Here’s the thing- investments these days are ways to make a solid return with as little risk as possible. This isn’t some rich guy stumbling across a dude hawking awesome homemade circuit boards at a fleamarket and offering to back him. This is swapping money back and forth, gaming systems to artificially raise prices and then cashing out to move on to the next thing. It’s gambling on a scale where the rubes (pension funds, bank depositors, etc) get to play but the big money dudes can afford to buy themselves into the role of the casino. The really rich- the “investor class”- wouldn’t play along with the investment game unless they could be assured that they couldn’t possibly lose. Even when the whole thing goes to shit and it looks like the party’s over, the big boys can afford to work the levers of government to make sure they still don’t lose even if it’s at the expense of everyone else.

So there it is. Rich people don’t add anything special to the economy either in terms of consumption or in productivity. They have the potential to do so, but having more money isn’t going to make that happen. This is the part of the story where We the People make these big piles of capital productive. We can either do it indirectly by our elected government levying taxes that go toward directly hiring workers and funding things like research and infrastructure. Or we can do it directly by stealing hubcaps and looting gated communities. Either way, rich people can suck it.